Professional Documents
Culture Documents
Compliance with the policies contained in this Statement is not obligatory in the case of
immaterial items.
National Council
The Indonesian Institute of Accountants
CONTENTS
Paragraph
INTRODUCTION 01
Objective
Scope 01
EXPLANATION 02-04
Identification of Development Stage Enterprises 02-04
INTRODUCTION
PSAK 06
ACCOUNTING AND REPORTING BY DEVELOPMENT STAGE
ENTERPRISES
In the past, many development stage enterprises often followed special accounting practices
and financial reporting that different from established enterprises. This practice included
capitalization or deferral of charges on all expenses without considering the probability of
recovery or subtracting the expenses from revenues. Alternatively, some development stage
enterprises present financial statements in ways that are not different from established
enterprises, that is accordance with generally accepted accounting principles.
Objective
This Statement prescribes the accounting treatment and reporting for development stage
enterprises.
Scope
EXPLANATION
(a) the enterprise devotes efforts to establishing the new enterprise; and
(b) principal operations should have generated only a significant amount of revenue.
PSAK 06
ACCOUNTING AND REPORTING BY DEVELOPMENT STAGE
ENTERPRISES
(a) financial position, cash flows, and results of pre-operations in accordance with general
accepted accounting principles in Indonesia applied to established operating enterprises;
and
Generally accepted accounting principles are applied to every development stage enterprise,
either in recognizing revenue or in determining whether costs should be expensed, or is to be
capitalized or deferred for amortization in future periods. Deferral of costs is limited to those
that provide a future benefit, including organization set up costs.
06 Primary financial statements and other information that have to be presented include:
(a) a balance sheet, including accumulated losses that should be described with a clear title,
such as “deficit accumulates during the development stage” in the equity section;
(b) an income statement showing revenues and expenses for each period being presented,
including a running cumulative total of both amounts from the enterprise’s
inception;
(c) a cash flow statement reflecting sources and uses of cash and cash equivalents for each
period, including a cumulative total from the enterprise’s inception;
(d) for every issuance, a separate statement of stockholders’ equity showing from the
enterprise’s inception:
(ii) amount of money (per share and in total) either in cash or non-cash
consideration received in exchange for stocks or other equity instruments
issued by the enterprise;
(iii) amount and nature of non-cash consideration, and the basis for its valuation.
08 The financial statements for the first year in which an enterprise is no longer considered
to be in the development stage shall disclose that in prior years it had been in the
development stage. If financial statements for prior years are presented for comparative
purposes, the cumulative amounts and other additional disclosures required by paragraphs 6
and 7 need to be shown.
Transition Period
Effective Date
10 This Statement becomes effective for financial statements covering periods beginning
on or after 1 January 1995. Earlier application is highly recommended.